What is a Premium Audit?
An insurance premium audit is a provision in most business insurance contracts. The purpose of the audit is to obtain the exact exposures and compare them to what was estimated by you. The exposures will be in the form of either payroll or sales figures you will be asked to report. This information is used to determine your final premium. It’s the audit that confirms what your premium is…”or should have been”. The audit is completed 1 year after you buy your policy. Shortly after your policy expires you will need to verify the accuracy of what you estimated when the policy was originally started.
Here is an example of how an audit can impact you:
When a contractor goes into business, he is asked to estimate what his sales figures will be over the next 12 months. Since it’s almost impossible to predict the future, a million things will happen that are unexpected. Due to this, a very conservative estimate is often given. Your agent provides you with a policy costing $700 per year based on your estimate. Everyone is happy, until a YEAR later when the audit paperwork shows up. First, you have to spend the time filling in and finding all of the information being asked for by the insurance carrier. As your filling out the paperwork you realize that your actual sales figures were TWICE the amount of your original estimate. The audit is processed and you receive a bill for an ADDITIONAL $700.
At Joseph D. Walters, we hear this complaint over and over again when we talk with our potential customers. Upfront, the cost seems low, but if you have a good year and exceed your estimate, you will be paying for it later.
Welcome to the world of THE PREMIUM AUDIT.
At Joseph D. Walters our policy is NOT subject to any premium audit…EVER.
This means that you’ll know your insurance cost upfront and receive NO ADDITIONAL BILLS throughout your policy term unless YOU make changes to your coverage.
The main reason you purchase insurance is to protect yourself against financial disaster. Your first mistake can be simply not knowing the differences between a policy that is audited versus one that is not. Why feel penalized for having a great year?
Just call us at 1-800-878-3808. Whether you are a power washer, roof or window cleaner, dealing with an experienced agency that specializes in the type of insurance coverage you need could be one of the best decisions you make regarding your business.
What you don’t know can hurt you. Let us make your business a priority.